The Calcutta High Court today put the West Bengal Government in the driving seat of Haldia Petrochemicals Ltd (HPL) by dismissing a Company Law Board order of January directing that the State Government transfer its 155 million shares in HPL to The Chatterjee Group (TCG).

A Bench of Mr Justice Jayanta Biswas also refused to grant stay of operation of the order that TCG had sought, for filing an appeal at a higher forum.

IOC entry

The Court also upheld entry of IOC as strategic partner in the company.

The CLB had pegged the price of the disputed shares at Rs 10 each and also allowed an exit route to the State Government (holding an additional 520 million shares in HPL) from the company by way of selling its stake to the Purnendu Chatterjee-led TCG.

According to HPL sources, by reversing the CLB order in regard to the disputed shares, the Court has ratified the 51.67 per cent majority stake control of the State Government (through West Bengal Industrial Development Corporation Ltd) in the company.

Appeal rejected

Mr Justice Biswas also rejected an appeal by TCG against the CLBs order that upheld fresh allotment of 150 million shares to IOC by HPL.

The State Government had roped in the refining and marketing company as a strategic partner in the project.

TCG, however, contested the issue of shares constituting 8.19 per cent of the paid-up capital.

It may be mentioned that IDBI and other lenders to the company had also became party in this courtroom battle, demanding allotment of shares as per the corporate debt restructuring process.

The fate of the plea, however, will not be known till receipt of the detailed order in the next few days.

The State Commerce and Industry Minister, Mr Nirupam Sen, expressed his satisfaction over the order.

The judgement has upheld our views and we are happy.

TCG official sources refused to comment.

Backgrounder

Differences started cropping up between the two promoters over injection of funds in the then ailing HPL from 2004, and the one-time friends began a court battle over ownership of the company in 2006.

TCG which for all practical reasons had to leave the management control of HPL to the State Government was the first to move CLB alleging mismanagement in HPL.

The State Government, on its part, cited repeated failure by the private partner to live by its promises.

The Government has also maintained that it was agreeable to exit from the company only if TCG takes the entire stake at one go at current market prices.